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InfuSystem Holdings Reports Revenue Increase of 12.8% with Over $3 Million of Adjusted EBITDA for the Second Quarter of 2008
MADISON HEIGHTS, Mich., Aug 06, 2008 /PRNewswire-FirstCall via COMTEX/ -- InfuSystem Holdings, Inc. (OTC Bulletin Board: INHI; INHIW; INHIU), the leading provider of ambulatory infusion pumps and associated clinical services, today announced financial results and provided a business update for the second quarter of 2008.
Mr. Steve Watkins, chief executive officer, commented, "Since becoming a stand-alone entity in October of 2007, we have executed a plan of action that has enabled us to build upon our strong foundation for pump management services, billing services, and 24/7 nursing support for ambulatory infusion pumps utilized in the treatment of colorectal cancer and other forms of cancer. While we are proud of our record, we have only just come out of the gate in terms of realizing our full potential as a major provider of ambulatory infusion pumps, supplies and related services."
"Earlier this year, we put new incentive plans and sales quotas in place and, as a result, have increased sales and continue to gain traction in the marketplace. We have enhanced training for the existing sales force, filled two new sales positions and hired two sales associates. Re-branding the company and highlighting the advantages of our services are also important elements in our overall business strategy. Over the past few months, we have rolled out our new website, increased our presence at major trade shows and created well-crafted sales literature to support our sales team. With solid relationships already in place among more than 60% of oncologist practices nationwide, we are building awareness among physicians and nurses on the expanded uses of our ambulatory infusion pumps for other conditions and cancers including esophageal, pancreatic and gastric cancers."
Mr. Watkins concluded, "By the end of the second quarter, our newly implemented strategies have begun to take effect as evidenced by double digit revenue growth of 12.8% for the second quarter of 2008, compared to results of InfuSystem, Inc. for the second quarter of last year, while under its prior ownership. We also generated $3.2 million of adjusted EBITDA for the quarter and now have over $8 million of cash as of June 30, 2008. With a newly minted marketing plan in place, expanded and motivated sales force, strong cash flow to fund our growth and a large and receptive market for our services, we believe that we are perfectly positioned to capture a meaningful share of the market in the months and years ahead."
Financial Results
Revenue for the second quarter ended June 30, 2008 was $8.8 million, versus $0 for the same period in 2007, which reflects the revenues recognized by InfuSystem Holdings, Inc. following the acquisition of InfuSystem, Inc. from I-Flow Corporation.
Operating income for the second quarter of 2008 was $1.1 million versus an operating loss of $1.1 million for the same period in 2007. The increase in operating income for the second quarter of 2008 reflects revenue and operating expenses recorded for InfuSystem, Inc. following the acquisition.
The net loss for the second quarter of 2008 was $1.8 million, or $0.10 per diluted share, compared to net loss of $2.2 million or $0.12 per diluted share, for the same period in 2007. The net loss for the second quarter of 2008 included a $1.9 million loss on derivative financial instruments, which is predominantly attributable to the increase in the publicly traded value of our warrants during the quarter, compared to a $2.0 million loss for the second quarter of 2007 and stock based compensation of $687,000 versus $611,000 in the second quarter of 2007.
Adjusted EBITDA for the second quarter ended June 30, 2008 was $3.2 million, as compared to an Adjusted EBITDA loss of approximately ($0.5 million) for the same period of 2007. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and excludes gain (loss) on derivative financial instruments, and stock-based compensation. Adjusted EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), and should not be considered in isolation of, or as a substitute for, earnings as an indicator of operating performance, or cash flows from operating activities as a measure of liquidity. The Company believes the presentation of Adjusted EBITDA is relevant and useful by enhancing the readers' ability to understand the Company's operating performance. The Company's management utilizes Adjusted EBITDA as a means to measure performance. The Company's measurements of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The tables below reconcile Adjusted EBITDA, a non-GAAP measure, to net income for the three and six months ended June 30, 2008 and 2007.
Reconciliation from Net Income to
Adjusted EBITDA: Three Months Ended June 30
I-Flow
(in thousands, except per share data) Predecessor
2008 2007 2007
Net Income $(1,801) $(2,198) $1,707
Adjustments:
Interest expense 933 15 (267)
Interest income - (1,173) -
Income tax expense - 209 1,130
Depreciation -- Pumps 967 - 292
Depreciation -- Other 45 - 43
Amortization 457 - -
EBITDA $601 $(3,147) $2,905
Adjustments:
Loss (Gain) on derivatives 1,947 2,025 -
Stock based compensation 687 611 64
Adj. EBITDA $3,235 $(511) $2,969
Adj. EBITDA EPS - basic 0.18 (0.03) N/A
Adj. EBITDA EPS - diluted 0.18 (0.03) N/A
Reconciliation from Net Income to
Adjusted EBITDA: Six Months Ended June 30
I-Flow
(in thousands, except per share data) Predecessor
2008 2007 2007
Net Income $2,996 $(423) $2,296
Adjustments:
Interest expense 1,891 15 (237)
Interest income (3) (2,324) -
Income tax expense - 429 1,524
Depreciation -- Pumps 1,930 - 1,275
Depreciation -- Other 86 - 86
Amortization 914 - -
EBITDA $7,814 $(2,303) $4,944
Adjustments:
Loss (Gain) on derivatives (3,284) - -
Stock based compensation 687 1,226 146
Adj. EBITDA $5,217 $(1,077) $5,090
Adj. EBITDA EPS - basic 0.30 (0.06) N/A
Adj. EBITDA EPS - diluted 0.28 (0.06) N/A
About InfuSystem Holdings, Inc.
InfuSystem is the leading provider of ambulatory infusion pumps and associated clinical services for oncology practices and their patients in the U.S. These pumps allow for the gradual delivery of a drug over a period of days in the privacy of one's home, compared to bolus infusion chemotherapy treatments that are given in a single high dose over a short period of time. Improved efficacy of the drugs, patient comfort, reimbursement to doctors for appropriate services and continuity of care all play a role in the growing trend toward this form of treatment. InfuSystem's pumps are primarily used for colorectal cancer, but they have been approved for other forms of cancer, thereby greatly enhancing the market opportunity for InfuSystem.
Forward-Looking Statements
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include general economic conditions, as well as other risks detailed from time to time in InfuSystem's publicly filed documents.
InfuSystem Holdings, Inc.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
(in thousands, except share data) 2008 2007
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents 8,373 3,960
Accounts receivable, less allowance for
doubtful accounts of $1,996 and
$1,638 at June 30, 2008 and December 31,
2007, respectively; June 30, 2008 and
December 31, 2007 include $48 and $103
due from I-Flow, respectively 4,425 6,304
Inventory supplies 320 364
Prepaid expenses and other current assets 477 1,263
Deferred income taxes 4 4
Total Current Assets 13,599 11,895
Property & equipment, net 11,945 13,504
Deferred debt issuance costs, net 1,580 1,918
Goodwill 56,580 56,544
Intangible assets, net 31,651 32,565
Total Assets 115,355 116,426
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable 1,058 1,076
Other current liabilities 791 1,886
Derivative liabilities 9,123 12,407
Current portion of long-term debt; June 30,
2008 and December 31, 2007 include $2,862
and $2,044 payable to I-Flow, respectively 2,938 2,044
Total Current Liabilities 13,910 17,413
Long-term debt, net of current portion;
June 30, 2008 and December 31, 2007
include $28,615 and $30,250 payable to
I-Flow, respectively 28,999 30,250
Deferred income taxes 4 4
Total Liabilities 42,913 47,667
Stockholders' Equity
Preferred stock, $.0001 par value:
authorized 1,000,000 shares; none issued - -
Common stock, $.0001 par value; authorized
200,000,000 shares; issued 18,315,430 and
18,315,430, respectively; outstanding
17,081,386 and 16,824,295, respectively 2 2
Additional paid-in capital 80,124 79,437
Retained deficit (7,684) (10,680)
Total Stockholders' Equity 72,442 68,759
Total Liabilities and Stockholders' Equity 115,355 116,426
InfuSystem Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30
I-Flow
Predecessor
(in thousands, except per share data) 2008 2007 2007
Net revenues $8,835 $- $7,832
Operating expenses:
Cost of Revenues -- Product and
supply costs 1,377 - 1,256
Cost of Revenues -- Pump depreciation 967 - 292
Provision for doubtful accounts 914 - 966
Amortization of intangibles 457 - -
Selling and marketing 1,193 - 986
General and administrative 2,848 1,122 1,762
Total Operating Expenses 7,756 1,122 5,262
Other income (expense):
(Loss) Gain on derivatives (1,947) (2,025) -
Interest income - 1,173 -
Interest expense (933) (15) 267
Total other income (expense) (2,880) (867) 267
(Loss) income before income taxes (1,801) (1,989) 2,837
Income tax expense - (209) (1,130)
Net (loss) income (1,801) (2,198) 1,707
Net (loss) income per share:
Basic (0.10) (0.12) N/A
Diluted (0.10) (0.12) N/A
Weighted average shares outstanding:
Basic 17,996,437 18,625,252 N/A
Diluted 17,996,437 18,625,252 N/A
Six Months Ended June 30
I-Flow
Predecessor
(in thousands, except per share data) 2008 2007 2007
Net revenues $17,365 $- $15,706
Operating expenses:
Cost of Revenues -- Product and
supply costs 2,842 - 2,587
Cost of Revenues -- Pump depreciation 1,930 - 1,275
Provision for doubtful accounts 1,775 - 2,659
Amortization of intangibles 914 - -
Selling and marketing 2,270 - 1,994
General and administrative 6,034 2,303 3,608
Total Operating Expenses 15,765 2,303 12,123
Other income (expense):
(Loss) Gain on derivatives 3,284 - -
Interest income 3 2,324 -
Interest expense (1,891) (15) 237
Total other income (expense) 1,396 2,309 237
(Loss) income before income taxes 2,996 6 3,820
Income tax expense - (429) (1,524)
Net (loss) income 2,996 (423) 2,296
Net (loss) income per share:
Basic 0.17 (0.02) N/A
Diluted 0.16 (0.02) N/A
Weighted average shares outstanding:
Basic 17,410,366 18,625,252 N/A
Diluted 18,442,363 18,625,252 N/A
InfuSystem Holdings, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
I-Flow
Predecessor
(in thousands) 2008 2007 2007
OPERATING ACTIVITIES
Net Income (Loss) 2,996 (423) 2,296
Items included in net income not
requiring cash:
Gain on derivatives (3,284) - -
Provision for doubtful accounts 1,775 - 2,659
Depreciation 2,016 - 1,361
Amortization of intangible
assets 914 - -
Amortization of deferred debt
issuance costs 338 - -
Loss on disposal of assets 302 - 163
Interest Income on Investments
Held in Trust - (2,318) -
Withdrawal of interest earned on
investments held in trust - 208 -
Stock-based compensation 687 1,226 146
Deferred Income Taxes - - (501)
Changes in current assets and
liabilities:
Decrease (increase) in accounts
receivable 104 - (606)
Decrease (increase) in prepaid
expenses and other current assets 830 364 (7)
(Decrease) increase in accounts
payable and other current
liabilities (747) 462 (1,066)
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 5,931 (481) 4,445
INVESTING ACTIVITIES
Payment of deferred acquisition
costs (105) (160) -
Capital expenditures (575) - (1,472)
Proceeds from sale of property - - 228
NET CASH USED IN INVESTING
ACTIVITIES (680) (160) (1,244)
FINANCING ACTIVITIES
Net capital distributions to
parent - - (4,744)
Principal payments on term loan (818) - -
Principal payments on capital
lease obligation (20) - -
Proceeds from issuance of
warrants - 313 -
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (838) 313 (4,744)
Net change in cash and cash
equivalents 4,413 (327) (1,543)
Cash and cash equivalents,
beginning of period 3,960 427 1,956
Cash and cash equivalents, end
of period 8,373 100 413
SUPPLEMENTAL DISCLOSURES
Cash paid for interest
(including swap payments/proceeds,
and excluding capitalized interest) $1,544 $- $-
Cash paid for income taxes $470 $377 $186
NON-CASH TRANSACTIONS
Additions to property (a) $60 $- $31
Property acquired pursuant to a
capital lease $480 $- $-
SOURCE InfuSystem Holdings, Inc.
